Liquidity 2.0

In the world of DeFi, decentralized exchanges (DEXs) operate differently from traditional markets and centralized exchanges (CEXs) like Binance. Instead of using the classic Order Book model, DEXs rely on Automated Market Makers (AMMs) such as Uniswap and Pancake Swap to facilitate efficient token swaps.
With the Order Book model, traders place buy and sell orders at fixed prices, and trades are executed by matching these orders. Traders place their orders and wait for the market to move toward their desired price. The closer the market price gets to the order price, the faster the trade is executed. This process can take time if the market lacks liquidity.

On the other hand, AMMs like Balancer, which is built on Ethereum, utilize an algorithm (simplified formula: X*Y=K) to process trades. In simpler terms, as you buy more of a certain asset, the algorithm adjusts the price to charge you more for that asset (the difference in price per token is lower in more liquid markets).

Overall, DEXs provide a unique approach to trading by leveraging AMMs and offering efficient token-swapping options for crypto traders.
For more we advise reading our Educational Program #2: Liquidity Explained.

LINKS
Website: balancer.fi
Twitter: @Balancer
GitHub: @balancer
Discord: discord.balancer.fi
Documentation: Whitepaper

So, what makes Balancer special?

Traditional decentralized exchanges (DEXs) typically rely on 2-asset liquidity pools, such as ETH/USDT. However, Balancer offers traders the flexibility to deposit multiple assets into a single pool. In the early stages of DEXs, if traders wanted to exchange an asset for another that was not paired in a pool, they had to perform multiple transactions to swap for the desired token.

Over time, developers enhanced the liquidity system, allowing users to create any pool. Furthermore, Balancer introduced Multi-asset pools, which enable users to connect different pools together (up to 8 tokens). This integration is known as Routing.
The underlying math behind these Multi-asset pools is called Weighted Math. It allows swaps between any assets, regardless of price correlation. The prices of the tokens are determined by the pool balances, the pool weight, and the volume of tokens being swapped.

Balancer Features:

Balancer has introduced a Portfolio Manager, allowing users to create an “index token” for each pool. Traders can then use this token to rebalance the prices of the tokens in the pool, and the user who creates the pool and the “index token” will earn from trading fees.
Another feature offered by Balancer is the ability to customize ratios in the pools. Unlike traditional DEXs that usually require a fixed ratio (e.g., 50/50 or 33/33/33), Balancer allows users to select a custom ratio (e.g., 70/30, 10/20/30/40, etc.). This flexibility is beneficial in minimizing permanent loss, as pools with a higher percentage of strong assets typically result in less permanent loss.
But that’s not all. Balancer also offers Liquidity Bootstrapping Pools, which are useful for new projects. These pools start with a ratio of 90/10 (where 90% is the new token and 10% is a highly liquid token) and a specified timeframe (days, weeks, months). The pool gradually balances the ratio between the tokens from the initial weight to the ending weight (e.g., 50/50). This approach addresses the common scenario where the price of new tokens starts high but may decrease if there is insufficient demand.
More features are listed in the official whitepaper.

$BAL Tokenomics

The $BAL token, initially launched on the Ethereum Mainnet, has expanded its reach to other blockchain networks such as Polygon and Arbitrum. This multi-chain approach allows for increased accessibility and flexibility in utilizing the governance features of $BAL.

As a governance token, $BAL grants holders voting rights related to protocol upgrades or changes within the ecosystem it represents. Through decentralized governance mechanisms like proposals and voting systems enabled by smart contracts, participants can actively shape the future direction of projects associated with $BAL on multiple blockchains.

Token Metrics:

Supply: 100 million $BAL
35% Minted at launch
65% Rewarding Liquidity Providers

Market Cap: $175 million
Price: $3.38
Supply in circulation: $51.9 million
TVL: $701 Million

The balancer team is also offering a BAL Grant Program whose purpose is to fund developers on an application-based model.

Conclusion ~ A “Balanced” finance.

In summary, Balancer provides a unique and flexible trading experience by leveraging AMMs, Multi-asset pools, and various features like custom ratios and Liquidity Bootstrapping Pools, catering to a wide range of traders and projects within the decentralized finance (DeFi) ecosystem.

Even though Balancer may not currently rank among the top 100 cryptocurrencies in terms of market capitalization, it remains a highly sought-after platform within the realm of decentralized finance (DeFi) enthusiasts and traders. Despite its position relative to other projects, Balancer has gained significant popularity for its innovative approach. For those seeking new avenues to explore in DeFi, Balancer presents itself as an enticing option. Its unique product offering allows users to create customizable liquidity pools with multiple tokens and varying weights. This flexibility provides advanced portfolio management capabilities that cater specifically to individual needs or trading strategies.

However, like any technology-driven platform operating within a rapidly evolving industry such as cryptocurrency and DeFi, Balancer is not without its drawbacks or challenges. Users must consider factors such as network congestion during periods of high demand which can affect transaction speed and cost efficiency. Nonetheless, Balancers is worthy of consideration for anyone interested in exploring alternative approaches towards achieving their goals in this exciting domain.

THIS IS NOT FINANCIAL ADVICE
Nothing in this report/analysis constitutes professional and/or financial advice. The shared content is for educational and informational purposes only. Do your own research before investing.

Deanonymizingthe Blockchain

Anonymity has always been a part of our society. It wasn’t something we invented in recent years. In fact, the earliest internet users remained anonymous because the technology itself was not accepted by society. For decades, these early users kept their identities hidden. It was only in the 90s, with the emergence of internet-based startups, that we began to see a shift towards more transparent online identities. As the internet became more mainstream and integrated into our daily lives, people started embracing personal branding and sharing their real identities online.

Can we anticipate a similar trend in the Web3 industry? Absolutely. As blockchain-based protocols continue to gain traction, it becomes crucial to place our trust in developers, project founders, and service providers. After all, what better way to establish trust than by understanding who they are?
Numerous projects and individuals have taken on the mission of tracking down malicious individuals and collecting data from them. Their goal is to educate their audience and make the Crypto industry more safe and user-friendly. But, tracking down these individuals is difficult, especially with the emergence of crypto-mixers and privacy layers.
However, Arkham Intelligence is now introducing a superior approach to address this challenge and monetize the collected data. Let’s dig in!

Arkham is a crypto intelligence platform that systematically analyzes and deanonymizes blockchain transactions, showing users the people and companies behind blockchain activity, along with data and analytics about their behavior.

LINKS
Website: arkhamintelligence.com
Twitter: @arkhamintel
Telegram: @arkhamintelligence
Discord: /arkham
Documentation: Codex

Arkham Intelligence

Arkham is built on seven fundamental principles that elevate crypto and emphasize the critical role of intelligence within it:

Deanonymization is happening, transitioning from pseudonyms to real identities.
Access to crypto data will be decentralized, disrupting traditional finance’s black box approach.
Crypto is becoming a core part of the global financial system due to its efficiency and reliability.
Crypto intelligence tools will be widely adopted, serving both individuals and large corporations.
The crypto intelligence economy will surpass $30 billion annually, rivaling traditional financial data markets.
Entity-based crypto data analysis is crucial for understanding activity and providing comprehensive platforms.
Crypto intelligence will drive self-regulation in the industry by establishing standards and trust through on-chain investigation and verification.

Major challenges in crypto intelligence:

Collection: Gathering reliable on-chain and off-chain data from various sources.
Aggregation: Combining data into a single source for easy querying.
Attribution: Linking real-world identities to addresses.

Arkham’s solution is Ultra, an AI system that synthesizes blockchain data from multiple sources. It provides a clear view of cryptocurrency entities and their activities. The Arkham platform contains millions of labels and entity pages.

The Profiler is the core feature, offering a holistic view of an entity/address’s activity, including transaction history, portfolio holdings, balance history, profit and loss, and more. Additional features include a visualizer, private labeling, alerts, dashboards, API access, and historical analysis.

Intel-to-Earn & the Arkham Intel Exchange

The Arkham Intel Exchange is a decentralized protocol designed to facilitate the buying and selling of data. Its purpose, as stated in the whitepaper, is to enhance liquidity in the market and make crypto markets more transparent, efficient, and just. It operates as a decentralized intelligence economy, allowing anyone to trade the native currency, $ARKM, for various types of information, including entity labels, hacker tracing, and curated data feeds.
Buyers can request intelligence by placing bounties, while sellers offer intelligence through auctions. All transactions, both bounties, and auctions, are carried out using audited smart contracts, ensuring that no centralized entity ever holds custody of funds.

The Arkham Intel Exchange is an innovative decentralized network that revolutionizes on-chain analysis. It enables, incentivizes, and rewards large-scale analysis, empowering both Arkham and its users to access the knowledge of a thriving community of on-chain sleuths. Over the past two years, this community has grown steadily and experienced significant expansion in 2022.
Buyers seeking specific intelligence can place bounties by staking $ARKM. The staked assets serve as the initial bounty. Once posted on the Arkham Intel Exchange, anyone can add to the bounty by staking an equal or greater amount of $ARKM, thereby increasing its value and the incentive for bounty hunters. Any participant can compete for the bounty by submitting their work, which then undergoes an intel verification process. The first verified submission receives the staked bounty.

Sellers also have the option to set up auctions for intelligence. If a seller believes they possess valuable information, they can submit it for verification. Once verified, the intelligence is put up for auction. Sellers can define auction parameters such as the end date and a buy-now price. Interested parties then bid for access to the intelligence.
Both bounty stakers and auction winners have exclusive access to the purchased intel for 90 days. Afterward, it may be shared with the broader Arkham platform for everyone to use. All $ARKM staking and payouts are managed by audited smart contracts, ensuring that Arkham never takes custody of the $ARKM.
To support the network, Arkham charges a 2.5% maker fee on submitted bounties and auction payouts, as well as a 5% taker fee on bounty payouts and successful auction bids. Intel submitted through bounties and auctions undergoes review by the Arkham Foundation, which either approves or rejects it. The Foundation’s response is validated on-chain.

If the original poster of a bounty wants to be the sole recipient of the intel even after others have joined, they can achieve this by buying out the stake of the joiners.
Here’s an example (from the official whitepaper): Let’s say the original poster placed a 1,000 $ARKM bounty, and two others joined with 1,000 $ARKM each. The original poster can buy out the joiners by staking an additional 2,000 $ARKM. In return, the joiners receive their original $ARKM back, while the total value of the bounty remains at 3,000 $ARKM, reflecting the increased demand for that intelligence. If the joiners want to participate again, they can do so by staking the new total bounty amount, in this case, 3,000 $ARKM.

Mindblowing! They’ve gamified the bounty system to incentivize both buyers and sellers. Love it!

Bounty hunters can claim the bounty by submitting intelligence on the exchange. To prevent spam, bounty hunters must stake 10 $ARKM in the smart contract, which they will lose if their submission is rejected. If the Arkham Foundation approves a submission, the exchange DON registers this response and reports it to the bounty smart contract, initiating the 15-day unlock timer. After this period, the bounty hunter can withdraw all $ARKM in the bounty contract (minus the exchange fee) to the address used for staking the submission of $ARKM. It’s also possible to make an early withdrawal before the end of the 15-day lockup period, but this incurs a 10% fee.

Sellers can enter the market of intelligence by conducting auctions. The Arkham Intel Exchange auctions operate similarly to auctions on NFT marketplaces. Sellers can set a purchase price, minimum bid, and length of the auction. Before the auction begins, Arkham verifies the submitted intelligence to prevent spam. To ensure commitment, auction holders must stake 10 $ARKM with their submission, which is forfeited if the submission is rejected. Like bounties, there is a 15-day lock-up period for winning bids in the auction smart contract before they can be withdrawn. However, auctioneers have the option to withdraw early for a 10% fee.

Bounties and auctions on Arkham Intel Exchange cover various types of intelligence. Exploit victims can offer bounties for information, while sleuths can auction off specific methods. Acquired intelligence remains exclusive to the acquiring parties for 90 days before becoming visible to all users. The UI will display existing bounties and auctions with options to claim or bid. To post a bounty, users describe the desired intel, set a time limit and size, and stake $ARKM. For auctions, holders provide descriptions and parameters and submit intelligence for review.

Click here to read our tokenomics analysis

Conclusion ~ The first intelligence token

Is it really true that if you have nothing to hide, you should show yourself? Well, not necessarily. In the Web3 space, being anonymous has become a brand, especially with artists using NFTs as profile pictures on social media. So, just because someone is not doxxed doesn’t mean they are hiding something. They might simply value their privacy and choose not to share their identity online. This concept may contradict the transparency narrative of blockchain, but it’s still crucial to respect user privacy. Do you agree? (I recommend reading this Twitter post: “The Blockchain Paradox“.) However, on the other hand, there are reasons why we want to know the individuals behind certain identities, such as when someone is raising funds for a project and we want transparency about where our investment is going.

Recently, Arkham has faced accusations of collecting and storing data for personal use, violating user privacy, and collaborating with the government. While these allegations may not personally affect me, as a builder and founder myself, I believe that incorporating a personal touch, like showing one’s face, is an effective way to do business and attract users or investors. I’m impressed by Arkham’s simple and efficient reward mechanism to entice buyers and sellers. However, the platform can also be misused to harm those who wish to remain anonymous by creating bounties, even if they haven’t committed any crimes or engaged in immoral behavior. Like any technology, it can be used for both good and harm, but it has the potential to create a safer industry and facilitate the onboarding of new users.

L2 scaling solutions

Arbitrum is an EVM-compatible Layer 2 scaling solution for Ethereum that makes transactions cheaper while preserving Ethereum’s security and decentralization.
Read more about Arbitrum’s tokenomics on the Tokenomics Analysis Page.

EVM-compatibility refers to the capability of creating and releasing smart contract code that is recognizable by Ethereum nodes as it adheres to the standards of the Ethereum virtual machine.

LINKS
Website: arbitrum.io
Twitter: @arbitrum
Arbitrum Bridge
Documentation: GitHub
Community: discord.gg/arbitrum

In 2021, Ethereum’s L1 processed over 1.2 million transactions per day (15 transactions per second). Even if this data might look high, it is still not enough to reach a larger audience, and during the Otherdeed Land Sale, gas fees reached 8000 GWEI (+2 ETH for gas fees); not very scalable, I guess.

This is where L2s offer a scalable solution, preserving the decentralization and security of Ethereum while scaling the chain fees (10-100x cheaper).

What are Ethereum Layer 2s? L2s handles Ethereum L1 transactions on a separate blockchain with the purpose of “extending” Ethereum L1 while preserving security and decentralization. But how? L2s execute transactions outside of the Ethereum network; once the transactions are performed, they send back a compressed (lighter) form of the transaction (a batch of transactions) to the Ethereum network.

One more thing, there are two types of L2s:
1. Optimistic Rollups (Arbitrum, Optimism, and more)
2. Zk-Rollups (zk-Sync, and more)

Why is Arbitrum a better solution?

Optimism and Arbitrum are both Optimistic Rollup solutions for Ethereum, but they use different approaches for detecting fraud. Optimism uses a single-round fraud-proof, which is faster but more expensive because it requires L1 execution. In contrast, Arbitrum uses a multi-round fraud-proof system that focuses on specific points of disagreement, resulting in higher network performance and not being limited by L1 gas fees.

Arbitrum owns more than 50% of the L2s market share and has more than $3 billion in TVL, making it the favorite L2s in the market also because Arbitrum runs its own Arbitrum Virtual Machine (AVM), which supports any version of Solidity and any other languages that are EVM-compatible (Vyper, YUL, etc.) and is the most popular L2s; on the other hand, Optimism requires a special Solidity compiler to generate OVM Bytescode, which works only with particular versions of Solidity.

Arbitrum is also a great support for developers and projects looking to develop on top of L2s; as a matter of fact, Reddit uses Arbitrum to scale its Ethereum-based Community Point System; ChainLink and Uniswap V3 are also supporting Arbitrum.

Conclusion ~ Long-term destiny of L2s

Numbers do not lie. Arbitrum is the most popular L2 in the market because it offers a better scalability solution. The question remains: Will they be suppressed by Ethereum’s plans to scale the blockchain? Well, at the moment, L2s are the best solution on the market, and we all know it because we all spent tons of dollars on gas fees in the last bull market.

Naffles ~ NFT Raffles Marketplace

Naffles is a P2P NFT raffle marketplace on Ethereum. Sellers can create raffles to sell their NFTs, and buyers can win blue-chip NFTs for a fraction of their floor price.
There are many people building bots to snipe cheap NFT sales on secondary marketplaces and sell them for a higher price, but this is very expensive in gas fees, and you may fail badly. Now you can use Naffles to win your life-changing NFT for even less than 1% of its FP, and if you think this is cool, you should know that Naffles allows sellers to sell their NFTs for the price they wish, no matter what the floor price is. It’s a win-win for both sides!

LINKS
Website: naffles.com
Twitter: @Nafflesofficial
Documentation: Litpaper
Neo Tokyo News Articles
Mint Website: mint.naffles.com
Community: discord.gg/naffles

Lead Partners:
ZkSync and Chainlink.

Web3-based project Collabs:
Ape List, Neo Tokyo, Kaiju Kingz, Doodles Alpha, Conium, Metaverse HQ, Steady Stack, This Thing of Ours and Non-Fungible Arcade, Llamaverse plus many others.

Sell NFTs with Raffles

So, how does Naffles work? It is very simple; sellers can create an NFT raffle on the Naffles platform by just listing their NFTs and deciding on the ticket price (ex: 0.1 ETH) and the number of tickets (ex: 100 tickets). Anyone can buy tickets and win an NFT worth 10 ETH for just 0.1 ETH. Once the raffle sells out or the seller decides to close the raffle, a random winner will be selected from the participants. Now the winner can either sell that NFT for profit or hold it and enjoy the utility! Easy, isn’t it?

Is there a fee for creating raffles? No, but a 5% fee is only charged once the raffle is successfully completed and sent to the Naffles Treasury to keep improving the ecosystem.
How is the winner drawn? Naffles uses Chainlink VRF for fully transparent on-chain winner selection.
More about Chainlink VRF here: docs.chain.link

Naffles is about to launch the mint of their Omnipotent Founders Keys on January 18th. The NFT collection is limited to 350 pieces, of which 50 will be held by the Treasury for giveaways and marketing purposes.

What are the benefits of the Omni Key?
1. Early access to the platform (only Omni holders will be able to list NFTs during beta access).
2. Max platform fee discount and reward pool.
3. Max future allocation and free raffle entry.
4.Access to a private Discord channel, and more.

Conclusion

The mint funds will be used for smart contract audits, gaming licenses, business registration, marketing, and giveaways. Selling NFTs has never been so easy, and Shamsi explains it very well in this YouTube video.
The Naffles ecosystem makes everyone happy, flippers and holders alike.

Become a Sovereign Individual

Foundation Services was founded in April 2020 with the goal of creating products that allow anyone to easily access and use Bitcoin and other decentralized technologies, empowering individuals to take control of their digital lives.

LINKS
Website: foundationdevices.com

Foundation Services designs and manufactures Bitcoin-centric tools that empower you to reclaim your sovereignty. They aim to build a different kind of hardware company that values open source and domestic production, starting with Passport and Envoy. These products are fully open source, with all software, electrical, and mechanical components available for review. There are no secret codes or restricted data.

Envoy’s wallet lets you securely send and receive Bitcoin using your Passport to store your private keys. It automatically connects to the Tor network, but you can also use your own node. Simply pair the user-friendly app with your Passport, set a PIN, and make a backup. Envoy also offers in-app support and the option to speed up transactions by setting a higher fee. This software is open source and licensed under the GPLv3.

ENVOY MOBILE APP
The perfect companion app for your Passport. Secure setup, firmware updates, and a Zen-like Bitcoin wallet. Quoting the website: “Envoy may be the simplest Bitcoin software wallet on the market.” The app is available in the App Store (iOS) and Google Play (Android).

The Passport Batch 2 is a hardware wallet that prioritizes your security and is available for purchase on their website for $259.00. It utilizes a camera and QR codes for communication and does not have any USB or wireless capabilities, making it highly secure. The lithium-ion battery has a capacity of 1200 mAh and can be replaced easily. The USB-C port is only for charging and does not transmit data.

PASSPORT BATCH 2
Passport Batch 2 is the next-generation hardware wallet assembled in the United States, featuring air-gapped security, completely open source, a 1200 mAh Lithium-Ion battery, and a digital camera to scan QR codes.

Passport is made with high-quality materials, including a durable glass display, a magnetic rear cover, a copper-plated zinc alloy frame, and a bright display that makes scanning QR codes simple. It is compatible with various software wallets, including Bitcoin Core, BlueWallet, BTCPay, Electrum, and others.

TEAM
ZACH HERBERT ~ Co-founder & CEO
KEN CARPENTER ~ Co-founder & CTO
Click here to see the full team and their investors.

Conclusion

In December, Foundation Services raised $7 million from seed investors led by Polychain Capital. The hardware and the app design have improved over time, but will this make Foundation Services a leader in the crypto security industry? Very hard to say considering its competitors. Still, having different options is not a bad idea; asset diversification across different cold wallets must be a priority. Also, isn’t the Nokia design lovely?

SuperVerse DAO

SuperFarm protocol has evolved in the SuperVerse DAO, home to Impostors and GigaMart, and is governed by the SUPER token.

SuperVerse is focused on crypto-gaming and NFTs. The SuperVerse goal is to onboard Web2 users through immersive blockchain gaming experiences and empower crypto natives with next-generation NFT functionality by delivering quality products within the SuperVerse ecosystem.

LINKS
Website: superverse.cool
Impostors
GigaMart

Read more about SuperVerse tokenomics on the Tokenomics Analysis Page

SuperVerse DAO Governance

The SuperVerse DAO will manage the Treasury, involving the community in the development of the ecosystem.

The SuperVerse DAO Treasury will consist of fees collected from:

Royalties on secondary sales of Impostors’ NFTs
Additional fee-generating mechanisms will be provided by smart contracts throughout the Impostors’ metaverse.
Platform fees from GigaMart marketplace sales

$SUPER is an ERC20 token that will be used in the ecosystem as a governance token, and $SUPER stakers will participate in creating and voting on improvement proposals (hosted on snapshot.org).
By staking at least 15,000 $SUPER within the designated DAO pools, it will grant you membership in the DAO (one staked $SUPER = one vote).

Once staking is available, the Treasury will have the task of distributing rewards to DAO members who are actively staking in the DAO pools.
The smart contract will distribute rewards fairly among the members with the below allocation:

20% Ongoing Development and Maintenance
80% Community Rewards

If you want to learn more about how the proposal and voting process work, I invite you to read the documentation at the link shared above.

GIGAMART
A user-friendly NFT marketplace designed for NTF traders to improve their experience with advanced and customizable analytics tools such as real-time chat, project updates within the marketplace, marketplace aggregation to optimize cross-searching, a notification system, and customizable dashboards.

IMPOSTORS
Impostors is a social-gaming metaverse on a mission to provide creators with robust tools to build and monetize original content within the Impostors Metaverse and provide players with enjoyable social gaming environments that include earning opportunities.

Conclusion

It seems like the SuperVerse team has a clear plan now that they have rebranded the product. The ecosystem structure is straightforward, so onboarding Web2 gamers and consumers would be much easier. Even though the name suggests a connection with the metaverse, the team is focused on gaming, with the main purpose of improving the gaming experience. Because at the end of the day, what interests you the most is having fun!